Euro Posts First Week of Gains in Four Weeks
The euro posted the first weekly gain this month as Forex traders were more optimistic this week. There were several reasons for the good mood, but the most important one was the pledge of Mario Draghi, the President of the European Central Bank, to do all that is necessary for keeping the euro alive.
Draghi promised “to do whatever it takes to preserve the euro”. The pledge was well-received by the FX market and led to risk appetite that remained for the rest of the week. Earlier, the speculation of Ewald Nowotny, a member of the ECB governing council, that the European Stability Mechanism may receive a banking license gave investors hope that is not all lost to the eurozone and its currency. Additionally, there were good economic reports from China that contributed to the optimism of speculators.
Of course, the question remains whether the positive sentiment would remain for long. European officials are infamous for their tendency to make decisions slowly and then implementing the decided measures even more slowly. It is likely that the good mood would evaporate without any more good news. Euro bulls should hope that more positive announcements will come.
EUR/USD climbed from 1.2122 to 1.2319, while its weekly low of 1.2041 was the lowest since June 2010. EUR/JPY was up from 95.11 to 96.65, rebounding from the record low low of 94.10. EUR/GBP advanced from 0.7767 to 0.7821, while earlier it reached 0.7761 — the lowest rate since October 2008.
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Earlier News About the Euro:
- Euro Extends Yesterday's Gains (2012-07-27)
- Euro Goosed Higher on Draghi Comments (2012-07-26)
- Euro Rallies on ECB Comments (2012-07-25)
- Euro Flounders on Germany, the Netherlands Credit Outlook (2012-07-24)
- Euro Below 1.21 as Concerns for a Major Spanish Bailout Mounts (2012-07-23)